N Chandrasekaran set to outline grand plans in London

The meeting is expected to discuss key parts of Chandra’s cluster strategy for the group and may even take decisions to roll out that strategy across companies.Kala Vijayraghavan, Baiju Kalesh&Arijit Barman | ET Bureau | June 28, 2017, 08:49 IST

Tata Sons chairman N Chandrasekaran is expected to outline his grand plan to revitalise the $103.5-billion diversified conglomerate at a crucial board meeting in London this week, said two people with direct knowledge of the development.

The meeting, which will start on Wednesday and continue till Friday, is expected to discuss key parts of Chandra’s cluster strategy for the group and may even take decisions to roll out that strategy across companies. This will be Chandrasekaran’s third board meet after taking charge on February 21.

With a sizeable percentage of revenue coming in from global businesses, Tata Sons will focus on identifying challenges and opportunities in a rather dynamic business environment — with Brexit in UK and immigration challenges in US, an official said. Global revenues are mainly contributed by Jaguar Land Rover and Tata Tetley. A Tata Sons spokesperson did not reply to a mailed questionnaire until press time.

Tata Sons typically holds two strategy meets in the middle and end of the year while all other routine meetings are a one day affair. It is unclear whether Rata Tata chairman emeritus of Tata Sons and a permanent invitee to the board will attend the meeting.

Barring the top 5 companies where he is non executive chairman, Chandra has divided over 52 group companies into 6 clusters — consumer and retail, communication & ITeS, services, financial services, real estate and infrastructure and agri and chemicals. A detailed presentation on the road for ward is expected at the meeting. Each one of them will have a cluster head in charge of governance, synergies and financial planning. This will in effect also create a new layer of management and leadership. It is speculated fir example that Harish Bhat will be given the mandate to streamline the consumer and retail pieces.

Currently the disparate retail pieces span across listed companies such as Titan, Trent, the JVs with Starbucks, Tesco among others and then the fledgling e-commerce business that is spreading it's wings into online groceries. Similarly, different financial services units include the 2 separate insurance ventures, Tata Capital, Tata Investnent Corporation. From asset management to NBFC and insurance the, various arms are all separate entities. The idea, said officials is to bring all of them together and unlock value.

"TCS is similarly compartmentalised as per verticals. That's the core of blue print, " argued an official in the know. Smaller companies too will be under the scanner, some divested, some to have PE investors to kickstart growth. "Warburg Pincus recently bought into Tata Technologies. It's a first time Tatas have done such a deal where they are no longer the controlling shareholder. Expect more such trades," added another old time Tata watcher.

Some of the low margin businesses have been earmarked already for sale. A whole list of non core operations have already been identified, team Chandra is believed to have streamlined it further. The exercise of mapping the group's portfolio was under taken last summer under Cyrus Mistry and deliberated upon by the Tara Sons board last September before Mistry was booted out. Board members Ajay Piramal, Amit Chandra and Nitin Nohria wanted a separate panel to carry out the detailed divestment programme. That plan may also get revived.